The concept and measurement of poverty

Abstract

This paper has a twofold aim. On the one side, without the presumption of being exhaustive, it tries to give a general overview of the different approaches and measures of poverty, and, on the other side, it focusses the attention on the absolute poverty indicators, describing the most important innovations introduced in the Italian methodology by the Scientific Commission established at beginning of 2022. Therefore, after a general introduction, the second paragraph mainly discusses the multiple dimensions of poverty and the approaches to provide a measure of these dimensions (relative and absolute poverty, income and consumption-based measures, the role of wealth, the importance of investigating hard to reach population and the subjective poverty). In paragraph three, an overview of the Italian measures of poverty in the European context is given, by describing the European Union Statistics on Living Conditions (EU-SILC) indicators and those compiled relying on national Household Budget Survey (thereof those about absolute poverty). In the fourth paragraph the attention is addressed to describe the Italian methodology to estimate absolute poverty, focussing on the recent innovations introduced. Paragraph five discusses the use of income instead of consumption in the context of Italian methodology. Finally, some concluding remarks are traced, raising specifically the issue of the nonmonetary components in the estimation of absolute poverty and the related challenges for the future research work in the Italian context.